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Rock Inc. has three divisions, Granite, Lime and Nina. All fixed costs are unavoidable. Following is the income statement for the previous year: Sales
Rock Inc. has three divisions, Granite, Lime and Nina. All fixed costs are unavoidable. Following is the income statement for the previous year: Sales Variable Costs Contribution Margin Fixed Conts (allocated) Profit Margin Granite Line Nina Total $501,000 $274,000 $230,000 $1,005,000 177,000 124,900 100,900 402,800 324,000 149,100 129,100 602,200 267,000 152,250 121,750 541,000 61,200 $ 57,000 (3,150) 5 7,350 $ a. What would Rock's profit margin be if the Lime division were dropped? b. What would Rock's profit margin be if the Nina division were dropped?
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